Tobias Adrian, the International Monetary Fund’s (IMF’s) Financial Counsellor and head of its Monetary and Capital Markets Department, has published an IMF Note arguing that tokenization is not merely a technology upgrade but a fundamental reconfiguration of how trust, settlement and risk management are organized in the financial system. The paper, “Tokenized Finance”, carries significant weight given Adrian’s role in shaping IMF policy on financial stability.
The central thesis is that tokenization shifts the locus of trust from regulated institutions to shared infrastructure and programmable code. Adrian acknowledges the potential for significant efficiency gains and other tokenization benefits such as reducing credit risk and broadening access to certain assets through fractionalization. But he argues this reallocation of trust demands public anchoring through safe settlement assets, governance of smart contract logic, legal certainty and international coordination. Without these, he warns, tokenization risks amplifying instability through speed, concentration and fragmentation.
Perhaps the most striking feature of the paper is what it largely omits. Beyond a single reference to crypto markets and a discussion of stablecoins, the entire analytical framework is built around permissioned distributed ledgers with identifiable participants, override mechanisms and auditable code. Adrian’s framework assumes infrastructure where authorities can reach critical control points, including the cryptographic keys that govern administrative functions such as pausing contracts or triggering emergency overrides.
The question is whether this framing is compatible with recent developments in the US. In March, the Federal Reserve, OCC and FDIC jointly confirmed that US banks can treat tokenized securities on permissionless blockchains equivalently to conventional securities for capital purposes. The SEC has provided a no action letter to the DTC enabling it to mint tokenized securities, including on permissionless infrastructure. And at a global level, the Basel Committee is reviewing its more restrictive approach for banks, which currently applies a prohibitive 1250% risk weighting to assets on permissionless chains.
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